TI Reports Declining Financial Results in the Third Quarter of 2019

October 22, 2019 by Paul Shepard

Texas Instruments Incorporated (TI) reported third quarter revenue of $3.77 billion, a decline of 11% from the same quarter last year, net income of $1.43 billion, a 9% decrease from the same quarter last year, and earnings per share of $1.49, a 6% decrease from the year-ago quarter. Earnings per share include a 9-cent benefit for items that were not in the company’s original guidance.

Regarding the company’s performance and returns to shareholders, Rich Templeton, TI’s chairman, president and CEO, made the following comments:

"Revenue decreased 11% from the same quarter a year ago, as most markets weakened further.

"In our core businesses, Analog revenue declined 8% and Embedded Processing declined 19% from the same quarter a year ago.

"Our cash flow from operations of $7.0 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the trailing 12 months was $6.0 billion and 41% of revenue. This reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production. (Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.)

"We have returned $7.4 billion to owners in the past 12 months through stock repurchases and dividends. Over the last 12 months, our dividends represented 48% of free cash flow, underscoring their sustainability. In September, we announced we would increase our dividend by 17%. Together, our stock repurchases and dividends reflect our continued commitment to return all free cash flow to our owners.

"TI’s fourth quarter outlook is for revenue in the range of $3.07 billion to $3.33 billion, and earnings per share between $0.91 and $1.09, which includes an estimated $5 million discrete tax benefit. We continue to expect our annual operating tax rate to be about 16% in 2019."